Commodities

Gold steady as US policymakers split on rate hike outlook

Price of gold

Gold held steady on Thursday, after hitting an eight-week low in the previous session, as the Federal Reserve minutes released on Wednesday showed the central bank was split on how inflation might affect the future pace of interest rate hikes.

Spot gold was nearly flat at $1,226.70 per ounce. It touched $1,217.14 in the previous session, its lowest since May 10.

US gold futures for August delivery gained 0.4 per cent to $1,226.40 per ounce.

The details of the June 13-14 meeting, at which the Fed voted to raise interest rates, showed several officials wanted to announce a start to the process of reducing the Fed's large portfolio of Treasury bonds and mortgage-backed securities by the end of August but others wanted to wait until later in the year.

Higher interest rates tend to boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.

Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.66 per cent to 840.67 tons on Wednesday.

Among other precious metals, silver rose 0.1 per cent to $16.10 per ounce. In the previous session, it hit a low of $15.84 an ounce, its lowest since Dec. 30.

Platinum fell 0.5 per cent to $905.65 per ounce after hitting an over eight-week low in the previous session, while palladium advanced 0.1 per cent to $841.00 per ounce.

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